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October 25, 2012

RBS Wins: Singapore LIBOR Papers to Be Sealed

Bank had claimed public availability would cause ‘prejudice’

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Royal Bank of Scotland Group was successful in its efforts to have documents sealed in a court case over LIBOR manipulation in Singapore. The decision came in a closed hearing after the bank said that public availability of the documents could have “extensive potential prejudice” on confidential regulatory investigations.

Bloomberg reported Friday that Singapore High Court Justice Lee Seiu Kin agreed to seal filings made after Sept. 6 in a lawsuit that was filed by a former RBS trader accused of rigging LIBOR. Tan Chi Min, formerly the Singapore-based head of Asian delta trading for RBS, brought suit against the bank in December, alleging that he was wrongfully dismissed and looking to win from the bank what he says it owes him: $1.5 million in bonuses and 3.3 million RBS shares.

RBS, for its part, filed court documents in January that said Tan deserved to be fired because he was guilty of “gross misconduct.”

On Sept. 19, Tan filed a 231-page affidavit containing transcripts of internal RBS instant messages in support of his claim that the bank was scapegoating him for LIBOR manipulation. He said that the rigging of the interbank rate was “common practice” among RBS’ senior employees. He also claimed providing input to rate setters was part of his job, and that senior management in Singapore, London and Tokyo was aware of what he was doing and condoned it.

A late September report by The Telegraph cites the alleged transcripts from instant messages from traders and executives at the bank that were included in the affidavit filed by Tan, as well as one allegedly sent by Tan himself in August 2007 to a Deutsche Bank trader that said, “It’s just amazing how LIBOR-fixing can make you that much money or lose it if opposite. It is a cartel now in London.”

On Sept. 24, the bank filed an action that requested that the Singapore High Court seal the papers until at least one investigation among those being carried out by the U.S. Commodity Futures Trading Commission, the Department of Justice’s fraud division and Britain’s Financial Services Authority was completed.

Labour MP John Mann, who serves on the Treasury Select Committee, said in the report, “The situation at RBS was even worse than Barclays. This is potentially significant criminal activity and there needs to be a full police investigation.” Britain’s Serious Fraud Office is considering criminal charges; the investigations by regulators in the U.K. and U.S. are ongoing.